21st Century Oncology continues rally; ACE Cash debt drifting down; J.C. Penney, Caesars mixed

By Stephanie N. Rotondo

Phoenix, July 23 – The distressed debt market was moving into higher territory on Wednesday after spending the first part of the week on a downward tilt.

21st Century Oncology Inc. was again in focus for distressed investors. The bonds were hit badly last week, but have been jumping back up this week, albeit on no fresh news.

The company’s debt had started trading down in early July as Medicaid and Medicare said it might slash payouts for radiation therapy equipment. That then resulted in rating agencies taking negative action on the company, given its high percentage of clients who are covered by those programs.

Meanwhile, a trader said ACE Cash Express Inc.’s 11% notes due 2019 were said to be “slipping without any real trades,” according to a trader.

The trader attributed recent weakness in the name to a settlement with the Consumer Financial Protection Bureau earlier this month regarding allegations of shady collections practices. The payday lender settled the case for $10 million including a $5 million civil penalty and up to $5 million in customer restitution. ACE Cash Express said it had cooperated with the bureau, implementing recommended compliance changes and enhancements and responding to requests for documents and information.

Sector peer Community Choice Financial Inc. was meantime unchanged, its 10¾% notes due 2019 at 81½.

Among consumer-driven names, J.C. Penney Co. Inc. was mixed on the day, according to a trader.

Casino operator Caesars Entertainment Corp. was also mixed, a trader noted.

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